In the first study to document the full size and scope of the commercial real estate market, using direct measurement of commercial property, the CoStar Group recently valued all commercial real estate in the U.S. at $11 trillion ( 1,000,000,000,000,000,000,  or one million million million or 10 to the 18th power).  At 11 trillion dollars, U.S. commercial real estate approaches the size of the 16 trillion dollar U.S. stock market. In addition to benchmarking commercial real ... Read more

The eagerly anticipated and long-awaited sequel for the commercial mortgage backed securities (CMBS) lending saga is a sure blockbuster in a commercial real estate industry starved for debt capital.  As the banks and Wall Street prepare for another romance, investors should expect fewer thrills.  This plot will have less to do with the supply of capital and more to do with the supply of property that can conform to more conservative underwriting criteria.  In ... Read more

Triple Net leased retail properties such as restaurants, drug stores, dollar stores, auto part stores and banks, remain one of the healthier sectors of commercial real estate due to continued strong demand by private investors seeking 1031 exchanges, and by various funds.  Investment sales volumes increased in 2010 over 2009, compressing cap rates 50-100 basis points, particularly for Class A product.  Causes of this boost in demand included the impending expiration of the Bush-era ... Read more

Effective January 1, 2011, California’s newest anti-deficiency statute applies to short sales. Newly enacted Code of Civil Procedure section 580e prohibits a deficiency judgment where: (1) the obligation is a note secured by a first deed of trust; (2) the property is a dwelling of not more than four units; (3) the short sale is made with the written consent of the note holder; and (4) the borrower/trustor is not a corporation or a political subdivision ... Read more

Hundreds of billions of dollars in commercial mortgages and construction loans will mature this year. Extend-and-pretend practices of banks and foreclosure reluctance by special servicers will decrease, based on recognition that increased absorption and rental growth will take more time, and an owner will not invest capital needed to preserve the asset knowing it may eventually be lost. Many banks have had sufficient time to build up cash reserves so they can now write down asset carrying ... Read more

In 2010, real estate values appear to have hit bottom and begun to stabilize in most markets, presenting fresh investment opportunities in the form of distressed properties and notes. Though obtaining financing can still be difficult, an abundance of pent-up investment capital competes for favorable opportunities, creating some risk of irrational frenzy. Properties must now be re-valued in accordance with their over-supply, reduced rents, cost of replacement, and realistic potential uses in changing markets. The good news ... Read more